According to the graph shown, if this economy were to open to trade, surplus would do all of the following except:
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
A. increase overall.
B. decrease for the producer.
C. transfer from producer to consumer.
D. create deadweight loss of CEFG.
D. create deadweight loss of CEFG.
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If a firm finds that the wage rate (W) is less than the value of marginal product (VMP), then to maximize its profit the firm should hire
A) less labor, which will increase the VMP. B) more labor, which will decrease the VMP. C) no more or less labor, because profits are greatest when W < VMP. D) more labor, because hiring more labor will increase both W and VMP until they are equal.
Which of the following statements regarding price elasticity of supply and the length of time for adjustment is FALSE?
A) The longer is the time period for adjustment, the greater is the price elasticity of supply. B) The longer is the time period for adjustment, the less is the extent to which resources flow into (or out of) an industry through expansion (or contraction) of existing firms. C) The longer is the time period for adjustment, the greater is the extent to which entry or (exit) of firms increases or (decreases) production in an industry. D) The shorter the time period for adjustment, the greater is the price elasticity of supply.
Which person is part of the labor force?
a. Bethany cares full time for a movie star’s children when the star is on location filming her next movie. b. Max cares for his toddler and infant full time. c. Heidi’s preschooler Mira is cared for by her teacher. d. Mira’s grandmother cares for her when she is not in preschool.
In a competitive market with free entry and exit, if all firms have the same cost structure, then
a. all firms will operate at their efficient scale in the short run. b. all firms will operate at their efficient scale in the long run. c. the price of the product will differ across firms. d. Both a and b are correct.